Many people, especially younger members of the workforce, tend to take an “out of sight, out of mind” approach to retirement savings. After all, with retirement years — or even decades — away, the idea of there coming a time when they will be able to put those hard-earned savings to use might seem more abstract than anything else. The truth is, however, laying out solid savings practices early on can make a tremendous difference. And you, as the employer, can help.

Open enrollment season is the perfect time to broach the topic of retirement savings — and not just to sign newly eligible employees up for the company 401 (k) plan. By providing support and guidance through what can be a confusing subject, you help ensure your team members remain on solid financial footing. You’ll likely gain their appreciation, too. Here are a few key topics to touch on in relation to retirement savings practices.

Remind Them That Retirement is Much Like Any Other Purchase in Life
The idea of “buying” one’s retirement might seem a bit unusual, but in essence that’s what they’re doing. Social Security will help when the time comes to retire, but it really isn’t meant to be a person’s sole form of income. By regularly setting aside money, be it in the form of paycheck deductions or additions to personal savings accounts, they’re investing in their future and helping to ensure a more comfortable retirement.
NOTE: Our Buying Your Retirement sheet does a great job explaining the importance of investing in one’s nest egg.

Remind Them That Today’s Decisions Can Have Lasting Effects
Retirement might seem to be a long way away, but it’s likely closer than your employees think. The decisions they make now can affect when — and if — retirement is possible. Encourage team members to assess their current financial situation and make sure they’re on a healthy path. Are they making smart investments? Are they managing their credit wisely? If not, do they know what steps they might take to get there?
NOTE: Our Avoid Debt and Credit Problems guide offers information they can use to start — or continue — down a safe path.

Remind Them Not to Get Discouraged
Team members often get frustrated when they see only minimal gains in their earnings from one month to the next. The important thing to realize, however, is that the world of retirement savings is a marathon, not a race. Remind employees that their savings plans will work differently for them, the longer they are in place. This is especially true when you factor in compounding. The earlier an employee begins their savings, the longer that money is working for them — and the more interest they will earn.
NOTE: Our The Power of Compounding information sheet offers useful tips to help explain this concept to your team.

We hope this explainer helps get the ball rolling on retirement savings discussions among team members. Of course, if you have questions — or if we can help in any other way — please feel free to reach out. The BCH team is glad to help!